Respect. Somehow I wouldn't dare to invest in a company that has already risen 1800% over the year 😅
In general, I always find momentum very difficult. It just feels wrong to invest in something that already looks overheated at first glance. But I know that it's a more than proven strategy. It's paradoxical how your own psyche gets in the way, even though you're aware of it.
But as the saying goes, the world belongs to the brave.
Good luck for the future 🙂
In general, I always find momentum very difficult. It just feels wrong to invest in something that already looks overheated at first glance. But I know that it's a more than proven strategy. It's paradoxical how your own psyche gets in the way, even though you're aware of it.
But as the saying goes, the world belongs to the brave.
Good luck for the future 🙂
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@Banana_Millionaire First of all, thank you!
I'm right there with you. I've always wondered why people "still go in there". For me, apart from Bitcoin, it was never understandable and to a certain extent rightly so.
But ever since I saw the S&P 500 Top 2 Momentum from @Krush82, something clicked for me. And in the following way:
If I always hold the craziest stocks for exactly 1 month, then there is a high probability that the trend will continue for another month. At the same time, I accept that there will be regular sharp drops. I believe that the system ensures that my average probability of profit is higher than with a world ETF and at the same time that there is a 90% probability that I will not experience a deeper drawdown in the next 15 years than a world ETF.
The only "fear" I have is "rolling a 1 10 times in a row".
So imagine I hold my 5 shares now and lose 10% in May.
Then there are probably 5 new stocks that I hold and they happen to have their trend reversal exactly in the following month. Again -10%.
And if I cash in on this unlikely event once and it occurs several times in a row, I have a certain risk of bankruptcy, which a world ETF does not have in this form at all.
That's why I have to adjust my risk properly. In discussion with my wife, I decided that we would go in with 16k over 4 months and then save up to 30k over the next few years.
But that's far less than 10% of our total assets. I want the thing to pay for itself quickly. And that also requires a bit of luck. Now we've already had a bit of a buffer from a rough month.
I'm right there with you. I've always wondered why people "still go in there". For me, apart from Bitcoin, it was never understandable and to a certain extent rightly so.
But ever since I saw the S&P 500 Top 2 Momentum from @Krush82, something clicked for me. And in the following way:
If I always hold the craziest stocks for exactly 1 month, then there is a high probability that the trend will continue for another month. At the same time, I accept that there will be regular sharp drops. I believe that the system ensures that my average probability of profit is higher than with a world ETF and at the same time that there is a 90% probability that I will not experience a deeper drawdown in the next 15 years than a world ETF.
The only "fear" I have is "rolling a 1 10 times in a row".
So imagine I hold my 5 shares now and lose 10% in May.
Then there are probably 5 new stocks that I hold and they happen to have their trend reversal exactly in the following month. Again -10%.
And if I cash in on this unlikely event once and it occurs several times in a row, I have a certain risk of bankruptcy, which a world ETF does not have in this form at all.
That's why I have to adjust my risk properly. In discussion with my wife, I decided that we would go in with 16k over 4 months and then save up to 30k over the next few years.
But that's far less than 10% of our total assets. I want the thing to pay for itself quickly. And that also requires a bit of luck. Now we've already had a bit of a buffer from a rough month.
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@Wealth-Accelerator gg very good month. I'm pleased that things are going so well with your Momentum model. It would have gone even better with SanDisk in the bag, wouldn't it?
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•@Krush82
Thank you. I wouldn't have expected such a start. But it's simply impossible to predict. My gut feeling tells me that May should be good too. But my gut feeling wasn't the best with Bloom Energy either 😅
And fun fact about SanDisk. I had hard coded them out of the draw at the beginning of last month because I knew I wouldn't be able to buy them.
In the meantime, I opened a deposit with which I could buy them, only to realize my faux pas. I thought that if they were now in the S&P500, they would also be in the MSCI World. But according to my research, obviously not yet. At least they don't show up on Ishares yet.
But if I remember correctly, they actually pushed Bloom Energy to the back in April, so it wouldn't matter. But I'll be interested to see when they appear in my investment universe, as they're currently blowing everything away.
I've seen that you've adjusted your negative signal rule. Do you now check weekly or every six months in the negative case?
I have also defined a safety anchor in my model after some trial and error to find a good signal for the really dramatic months.
My pot 3 checks whether the momentum score is -40 or lower and if it is, the pot goes into the money market with 35% of the total capital.
I identified a good threshold at -40 in the backtest (beware of potential overfitting), but I was also able to explain it to myself quite clearly.
For example, if we are in a sideways market and run -10% on a 1M view. Then the signal takes effect at -40 and I find that appropriate. Again, gut feeling, but consistent with 19 years of "capital market research".
Will you also be producing an April report or do I have to look at your Wikifolio feed?
Thank you. I wouldn't have expected such a start. But it's simply impossible to predict. My gut feeling tells me that May should be good too. But my gut feeling wasn't the best with Bloom Energy either 😅
And fun fact about SanDisk. I had hard coded them out of the draw at the beginning of last month because I knew I wouldn't be able to buy them.
In the meantime, I opened a deposit with which I could buy them, only to realize my faux pas. I thought that if they were now in the S&P500, they would also be in the MSCI World. But according to my research, obviously not yet. At least they don't show up on Ishares yet.
But if I remember correctly, they actually pushed Bloom Energy to the back in April, so it wouldn't matter. But I'll be interested to see when they appear in my investment universe, as they're currently blowing everything away.
I've seen that you've adjusted your negative signal rule. Do you now check weekly or every six months in the negative case?
I have also defined a safety anchor in my model after some trial and error to find a good signal for the really dramatic months.
My pot 3 checks whether the momentum score is -40 or lower and if it is, the pot goes into the money market with 35% of the total capital.
I identified a good threshold at -40 in the backtest (beware of potential overfitting), but I was also able to explain it to myself quite clearly.
For example, if we are in a sideways market and run -10% on a 1M view. Then the signal takes effect at -40 and I find that appropriate. Again, gut feeling, but consistent with 19 years of "capital market research".
Will you also be producing an April report or do I have to look at your Wikifolio feed?
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What exactly does the -40 momentum score refer to? There is still an April update here. I just have to fiddle it all apart a bit, as I had two parallel investments with different assets in April. How exactly I will deal with the "ignoring" of the negative spy momentum signal in the future and how often I will check and then re-enter is not yet 100% certain. It could also be that, at least for me personally, I am still invested with a certain amount, even if the signal for the wiki is out of market. The SanDisk problem will remain for the time being either way and I won't be able to include it in the wiki 😫 I might also try this approach in an S&P global 1200 momentum project.
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•@Krush82 the -40 refers to the entire investment universe.
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@Wealth-Accelerator So the average momentum score of all MSCI World stocks or how do you calculate that?
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•@Krush82
1M/3M/6M/9M month-end values from the MSCI World. Use an Ishares ETF as the basis for calculation.
1M/3M/6M/9M month-end values from the MSCI World. Use an Ishares ETF as the basis for calculation.
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